tv World Business WHUT May 9, 2010 10:00am-10:30am EDT
>>abirached: this week on world business... >>a bubble building in the building trade. china's property market is too hot, but slowing it down will be far from easy. >>the real estate industry is a crucial component of the chinese economy. and in fact, building residential housing alone is about 10 percent of gdp. >>and on the road to drum up investment for infrastructure. india's seeks foreign funding for its ambitious highway expansion plans. >>i think internationally people still are somewhat skeptical about india's ability to change the rules and regulations and do everything else that's required to really build infrastructure. i think they'll be surprised to see the amount of progress that's being made." >>plus brimming with natural beauty and resources, the papua region of indonesia is a very profitable paradise.
>>the economy growth in papua province is more than the national average, average is 8% per year. >>abirached: hello and welcome. i'm raya abirached and this is world business, your weekly insight into the global business trends shaping our lives. china's rapid recovery from the financial crisis has been matched by an equally astonishing jump in the property market with prices in some cities doubling over the past two years. and the government, which fuelled a frenzy of stimulus driven construction, is now seriously concerned. >>reporter: april saw frantic
activity in property sales centres across china, with demand and prices breaking records. >>here in the second tier city of chongqing, home to some 200 developers, mid-range 2 bedroom apartments are fetching around 75,000 us dollars double the 2006 cost. >>the 500 homes offered here sold out quickly, despite a 10 percent price hike in a single weekend. >>luo : for south group, sales have been good. in the past couple of days, we've raised for our rose city properties! >>reporter: chongqing is a barometer for sentiment nationwide. >>at its 4 day long spring housing fair, developers sold over 18,000 apartments up 87 percent on 2009. >>city wide deals amounted to 1.3 billion dollars a rise of 120 percent. >>and given the sheer size of the market, a bursting property bubble could dwarf dubai's woes.
>>though among the buying public, views are mixed on the impact of today's roaring prices. >>prices are several times higher than a few years back. it's higher than i expect to pay; >>i feel the price is a bit higher than before, but it's not too bad. >>reporter: this is hardly the talk of a disgruntled population. but then those shopping for property, generally have good salaries typically with monthly household incomes of over 1000 dollars or they're able to leverage other assets. >>klibaner: one thing about china's residential real estate market that i think most people don't really understand very well is that what is called mass market housing is really geared for upper middle class white collared workers. and the amount of housing under that category that's been built thus far has only been enough to penetrate that far down the scale. >>reporter: while there appears to be enough demand for this category of supply, the government, nonetheless,
is worried. >>that's because the well off and even families with pooled resources are parking their money in multiple properties as bank interest rates are lower than inflation. and this is fuelling runaway prices. >>at the same time, an ever growing mass of workers can't afford to buy their first home. >>ren: the chinese government should control the activities of those who buy purely to invest and make huge profits including controls on second homes, third homes and loans. it needs to control these. >>reporter: it needs to, politically, because bitterness is running high, particularly among those fresh out of university especially so in metropolises like beijing and shanghai. prices there are up to four times more than in china's interior an apartment costs 110 times the average urban income near the coast. >>and in a country where young males outnumber females largely the impact of the one child policy and gender selection young men have
problems securing a second date unless they own a home. >>klibaner: the social implications of having an apartment is very important, very high. so if you're a young man living in the city, if you want to get married, your in-laws your future in-laws expect you to own an apartment. so getting on the housing ladder is an important social issue. >>reporter: in china, it's said that pushy mother in laws not only fuel family conflicts but that they also help stoke soaring property prices. >>the government is responding with policy fervor. >>to rein in beijing's rampant market, families already owning an apartment can't buy another. and borrowers must prove that their tax affairs are in order before the banks can grant a home loan. >>mackie: the new measures aren't that strict country wide, but there's been a tightening. minimum down payments on 2nd homes are now 50 percent of the sale price and mortgages are not allowed on 3rdproperties. here
in chongqing, a trial property tax may be introduced soon where those with 3 properties and more could be liable for a 1.2 percent annual tax on almost the full market value of eachhome. >>reporter: as for developers, the government has frozen applications from 45 companies to raise some 18 billion dollars in share issues. >>its goal is to put a brake on price hikes but avoid seriously deflating values. any cooling of theproperty market could hurt powerful interest groups: from local governments which earned over 200 billion dollars from land sales in 2009 to state owned banks and developers. any slump would lower growth and tax revenues plus raise unemployment. >>klibaner: the real estate industry is a crucial component of the chinese economy. and in fact, building residential housing alone is about 10 percent of gdp. so from the government's perspective, looking at how they manage the economy, keeping a robust residential market is crucial. >>reporter: but the problem
of providing newer housing for lower earners remains. so, in trial cities, the government is poised to embark on a programme of offering low-rent social housing - in chongqing's case, some 700,000 apartments over the next decade. >>in a creative burden-sharing move, the authorities have cajoled large developers to lend some of their housing stock to the city for up to 5 years - typically to house graduates who've just started work. >>luo: it'll bring opportunities for us. for after five years, many may want to buy that home because they know the area well by then. it'll help each other. >>reporter: but this will also take time. for now, demand for housing is so strong that despite thegovernment's best efforts to cool the market, the effect may be limited. >>the people's republic is getting used to the fact that even state controlled capitalism....is tough to control.
>>india is on a roll. the imf just raised its prediction for gdp growth to nearly 9 percent in 2010; a figure that could rise even further as the country addresses its poor road network with one of the most ambitious infrastructure roll outs in history. but the project will be expensive and fundingwill prove crucial to its success. india's highways and road transport minister kamal nath has beenon the road himself looking for investors. >>reporter: kamal nath is on a mission... a mission to drum up funding for his huge infrastructure project. >>first stop hong kong... to meet with potential investors... and from there to new york. >>he needs 70 billion dollars to build over 20,000 kilometres of roads... promising opportunities for those willing to support the project. >>nath : well, i'm looking for investments in the road sector and our concessions
because it's a very good asset, there's no traffic risks, it has a good return so pension funds, insurance funds, infrastructure funds are those that should be looking at india in a more intense manner. >>reporter: potential returns could exceed 20 percent... especially with the growth in traffic thatthe new highways are expected to unleash. >>jalan: if you're seeing 8 to 9 percent gdp growth, if you're looking at 15 percent automobile growth, where will these automobiles travel? the other thing is supply creates demand. i have seen in mylife in india across sectors, across industries, if you have supply there is a lot of latent demand. >>reporter: but there is always a risk... especially in a country which has a history of politicians overpromising and under-delivering... further hampered by bureaucracy and red tape. >>but this time it seems there is a real will to progress. >>nargolwala: i think
internationally people still are somewhat sceptical about india's ability to change the rules and regulations and do everything else that's required to really build infrastructure. i think they'll be surprised to see the amount of progress that's being made. >>reporter: the indian government has already started addressing issues that would otherwise have proved a hurdle. pushing through changes in land acquisition, for instance, to speed up the process. >>nath : it is a huge challenge but i do hope we'll be able to address it. i have put things in motion. we're on track but it'll be six months more before we can address the capacity building, which we need to really have within ourselves to manage such a huge programme. >>reporter: domestic companies are already getting involved. >>reliance infrastructure is the third largest infrastructure company in the country. it makes everything from roads to power plants to mass transport systems and is attracted by the scale of the rollout. >>jalan: it is looking too ambitious right now, but honestly i feel it's
doable. the elements required to do the 20 kilometres are falling in place, and there is a time lag...the 20 kilometres aren'tgoing to happen tomorrow...clearly, if you want to develop 20 kilometres and you take a time cycle of 30 months you must have 50 kilometres of construction a day to bid out. >>reporter: it is vital for india to do this. >>despite rapidly accelerating growth that the west would envy, the real comparison should be made with india's neighbour china. >>chatterjee : if you see indian manufacturers complain as to why they can't produce goods with international cost they can produce them at international quality now, but not at international cost, compared to china or taiwan the biggest complaint is about infrastructure bottlenecks. the huge supply chain the jam in moving stuff from one place to another. >>reporter: india's creaking infrastructure is facing
a huge hurdle in closing the gap. >>but many analysts believe india will hit the 20 kilometre a day mark within the next 3 years. not only that the very act of constructing highways on this scale will have a huge impact on the wider economy. >>chatterjee : the sheer act of a large infrastructure project like roads with its attendant demands, like steel, cement, construction equipment, labour and the mobilization of resources that it does...the net effect of it is that it will impact gdp by 2 percent. >>reporter: it will be a challenge, but then sometimes a bold move is what's needed. >>chatterjee: the announcement of 20 kilometres a day was dramatic. politicians need dramatic statements, as much as kennedy said america will put a man on the moon. there was a huge credibility issue there, but if you set your goal posts high, two things happen: one, people take the minister seriously, saying he's passionate about his job, and he's passionate about making it
happen. it also defines the goal post: so at every meeting you can test every hypothesis on every action by saying: whatcan we do better to reach our goal of 20 km a day? so i think it was an act of great statesmanship for him to up the ante by saying, "we will not behave like yesterday. >>reporter: because the focus is now securely on the future. india is a country on the move, and where they are going they do need roads. >>still to come on world business... >>remote but rich in resources, how indonesia is looking to open up papua to inward investment. >>and the technology that could revolutionize the way we play and watch sport. >>changing the game... and the rest in just a moment on world business...
>>the papua region of indonesia may be remote, but it is also incredibly rich in natural resources with huge reserves of copper, coal, oil and gas. our executive editor alan friedman sat down with thegovernor of the area barnabas suebu to find out more about how he plans to open up the region to investors and maximize its potential. >>suebu: the economy growth in papua province is more than the national average, average is 8% per year and it is growing it's a very challenging province but it is growing now but i think we have totake into consideration long terms considerations not just extract the raw materials and we will beso called boom
bust economy but i think we can do our best to attract the investment keep green develop new models so that the resources that we have can be managed for long terms purposes. >>reporter: what are the key natural resources, the energy and other resources that you have there? >>suebu: papua has one of the largest reserves oil and gas. and bp is now producing and exporting,just started. and we have other places. but for papua, even though we have big potentials of coal... but we don't want to use coals for our economy. we are now promoting so called low carbon economy. and that's why the cdm scheme, clean
developing mechanisms scheme has to be promoted in papua. and we are seeking a new models, businesses and new models of development which is very friendly tothe environment related to the climate change problems. >>friedman: but what are you offering investors actually? >>suebu: first of all is we have to prepare information, right information. put papua on the map so that the international community know papua, with in the whole policy of indonesia. to attract the investment, i think giving them services, tax facilities is very important. but also, but i think in our bureaucracy how to give to the investors
services, quality and then reliability and by doing that we hope our leadership and bureaucracy can do our best to attract the investor. >>friedman: now, when we talk about tourism, do you really think you are recognising your potential? >>suebu: we have big potential but why is so few tourist coming into papua because of ...first thing is the lack of infrastructure the second thing is after the availability of infrastructure, howto promote to tourism, especially eco tourism. we have... large of sea, marine based tourism, eco tourism we have here on the top of the mountain-snow, glacier. down too mountain ecosystem that is an alpine ecosystem. mountain and tropical combined with one
location. >>friedman: but a lot of people, when they think of papua, let's be honest, think of war, conflict,controversy. that is a legacy issue from 10-15 years in the past. is that still haunting you? >>suebu: in the past papua has conflict, controversy. the best way to solve the political end, secure its problems in papua is giving the people the room for peace justice and prosperity. >>friedman: but how are you doing that? can you explain what your doing? >>suebu: we are giving more spending for public services at the village level and we started thisprogramme i sent his we call stimulus funds. nowadays every village 2000 us u to 70000 us dollar per village per year,
improving the food and nutrition, the health care, the primary education healthyhousing, drinking water and sanitation. nowadays is cash flow in the village level is more than 100million us dollar per year cash managed by the people themselves and this strategy we call people centred and people driven development strategy for human development. >>friedman: does that 100 million dollars you are talking about actually get to people through microcredits or some other device? >>suebu: now we started with microcredit because the money sent by the government from the nationallevel even from world bank from provincial level and from the district level that is government money as a stimulus fund and when we are empowering to do by themselves from the people
by the people and for the people. >>sports scientists are constantly investigating ways to improve our enjoyment of sport, both as participants and spectators. in dublin, one particular team of researchers is hard at work looking at everything from smart clothing to computers that watch and automatically analyse football matches. >>reporter: hockey practice...under the watchful eyes of an assortment of remote controlled cameras...it's another trial day for a project designed to ultimately provide high quality, multi camera sports coverage...at, crucially...an affordable price... >>smith: the cost of capturing a game is very prohibitive so are there ways to create better techniques for capturing a game that will
help reduce the costs. >>reporter: that cost reduction could come thru amatuer directors controlling multiple cameras, evenremotely from another country...but the fact that entertainment giant disney, 80% owner of sports channel espn, has decided to collaborate with dublin based clarity research on the project suggests it has serious commercial potential... >>at clarity...90 engineers are constantly looking for different angles in digital technologies, much of it applicable to the sporting world... >>de jong: imagine someone told you they were teaching a computer to watch, say, a game of football, then automatically pull out all the best bits, roll them together into a highlight package of say 2, 3 or 10 minutes, and have them ready to run at the final whistle...you'd say...that's science fiction! but you'd be wrong. >>reporter: it works something like this...when, a goal is scored in football, the pictures and audio often follow a familiar
sequence....wide shot with goalposts in it...commentator's voice and crowd noise rises....close up of scorer....wide shot with goalposts in it...commentator's voice and crowd noise rises....close up of scorer.... >>sadlier : we can train the software to pinpoint these features when they occur in the broadcast and the idea is when they occur in a reasonable amount of time together, we can say something interesting is happening in this period of the broadcast. >>reporter: simple. except it isn't. because while computers can identify certain camera shots, by, say, the position of lines on the pitch...similar shots are often used when nothing too exciting happens...the result being that right now...if you tell the computer to sort out just 2 or 3 minutes ofhi lights...it'll most likely leave some rubbish in...and some good stuff out... >>sadlier : say for a 90minute soccer match, our best results
were for 10 or 15 min summaries. thatmeant we got all the important info including the summary, some near misses and extra footage as well. >>reporter: so refining the system is an ongoing process.....but the ultimate application could be hugely cost-effective...and profitable.... >>sadlier : the broadcaster would...say...last nights football match is automatically downloaded toa handheld device. automatically processed without them even knowing and then presented as last night's summary ready to be viewed at your leisure. >>reporter: they attack leisure of a different kind in this lab...by developing smart clothing, suchas this footpad equipped with pressure point sensors... >>lau: for example for high jumping the impact point from your foot is important; in a marathon youneed to know whether the person is performing at the optimal posture or the way he used to run. if it goes wrong it means he's injured or very tired.
>>reporter: this vest tells you whether you're breathing is too shallow...this mouthguard could one day measure athletes stress by their teeth grinding...all clever stuff, but nothing right now is proving harder to develop than a gadget that'll analyse one particular product of heavy exercise... >>jong: and that.....is sweat..... >>reporter: why is sweat important? because real-time analysis can tell you how fast you're losing electrolytes and therefore exactly when you should be topping up with liquids...till now...just a matter of guesswork... >>lau: traditionally you have to collect a sample, freeze it, seal it, send it to the lab and measure it in the next few days. now we have a gadget that measures it in real time when you're actually performing the exercise. >>reporter: real time is a crucial aspect of everything they do here. this court, surrounded by 9 low-grade
cameras, provides instant analysis of players wearing sensors. >>o'connor: the algorithms that are running in the background are automatically recognizing what the players are doing. where they are on the court, what activities they're performing and what their opponent is doing...because obviously that is very important for technical and tactical perspective. >>reporter: but whether its cameras, clothing or computers, the mass market potential of the products here will depend very much on how cost-effective they are... >>o'connor: the cameras themselves are of the order of 200 euros, 250 euros....the hardware itself in terms of the visual sensing is very cheap and could be within the reach of most tennis clubs. >>lau: the material that we use are not expensive. if you talk about mass production its quite cheap. >>reporter: although you might not want to head down to the shops just yet... >>sadlier: i would expect maybe in 5 or 6 years.
>>smith: r and d manager, disney research we really can't put a timeline on research. >>lau: in terms of commercialization it's probably about 2 years away. >>o'connor: i would say 2 years, 3 years we'll look at recouping the initial cost of the research. >>reporter: you'll be rich beyond your wildest dreams! >>o'connor: i won't be rich, i'm a researcher. >>that's it for this week's world business. thanks for watching. we'll see you again at the same time next week.